BHP facing shareholder demand it dumps membership of the Minerals Council of Australia

By Nick O'Malley Senior writer

Updated19 September 2017 — 6:32pmfirst published at 10:01am

BHP is facing a demand by activist shareholders that it end its membership of the Minerals Council of Australia, the powerful lobby group whose campaigning has helped block successive governments from tackling carbon emissions via a clean energy target or carbon tax.

The resolution calls for the termination of paid membership of industry bodies that have demonstrated a pattern of advocacy on policy issues at odds with the company's position on climate change.

The Minerals Council of Australia has close government ties, particularly with the conservative wing of the Coalition that opposed the mining tax and is now seeking to block a clean energy target.

A supporting document notes that, "in particular, we question the long-term attractiveness to shareholders of our company's public policy advocacy through the Minerals Council of Australia (MCA). The inconsistencies between our company's policies and the MCA's lobbying positions are clear. In June 2017, the MCA sought to undermine adoption of the Finkel Review's recommendations on energy policy by the federal government. These activities diminished the federal government's ability to resolve a national policy issue of material relevance to our company and the stability of its operations.

The resolution, which also calls for disclosure of all payments by BHP for direct or indirect lobbying relating to climate and energy policy, was lodged with BHP on Friday. The company has yet to notify the market, but earlier today put out a statement saying in part that:

"The role of each member of an association is to articulate its view in a clear and constructive way, and to seek to influence the association through free and open debate."

"This is certainly how we see BHP's role within the industry associations to which we belong - both in Australia and globally. It is not the role of any association to represent BHP and there are times when our views are not aligned. We keep under review our alignment with, and membership of, industry associations. We also communicate our own views directly, through submissions, media commentary, speeches, reports and other engagements."

The statement said that by the end of the year BHP would publish a list of "the material differences between the positions we hold on climate and energy policy, and the advocacy positions on climate and energy policy taken by industry associations to which we belong."

"The inconsistencies between our company's policies and the MCA's lobbying positions are clear.": BHP shareholders said in a resolution.Credit:AP

In a statement to the ASX on Monday after the market closed, BHP said the resolution was "not in the interests of BHP shareholders as a whole". BHP said the board was recommending that shareholders vote against it, and against another resolution also put forward by the Australasian Centre for Corporate Responsibility.

Brynn O'Brien, the director of the Australasian Centre for Corporate Responsibility, which wrote the resolution, said BHP's statement at least demonstrated that the company recognised the threat to its reputation and to shareholder value of the Minerals Council position on renewable energy and climate change policy.

"We are not the first to note the inconsistencies between BHP's own policy positions and business interests on one hand, and the MCA's advocacy on climate and energy policy on the other. Investors have brought this issue to BHP's attention several times," she said in a statement.

"While BHP is at pains to voice its support for policy measures aimed at limiting global warming to well below two degrees celsius above pre-industrial levels, the MCA has demonstrated a pattern of vociferous and influential lobbying which has obstructed progress on policy in Australia towards achieving that goal.

We are not the first to note the inconsistencies between BHP's own policy positions and business interests on one hand, and the MCA's advocacy on climate and energy policy on the other

Brynn O'Brien, the director of the Australian Centre for Corporate Responsibility

Should BHP end its association with the Minerals Council, it would be viewed as a serious blow to the lobby group, which has maintained hard line climate policy even as many key industry players have called for certainty on energy policy

The move comes after AGL quietly abandoned its membership the Minerals Council last year, declaring in a policy document, "AGL's positions on climate change and renewable energy differed from those held by the Minerals Council of Australia and the Australian Petroleum Production and Exploration Association, and AGL has elected not to renew its membership of these organisations."

A spokesman for APPEA said the organisation had not been informed of such concerns by AGL.

The Minerals Council has been approached for comment.

The shareholder activist Stephen Mayne said such resolutions were rare in Australia, but used often and with success in the United States and United Kingdom. He said he doubted the resolution would succeed, but that it could still prove to be a useful tool of activism because it would force the board to debate its contents and it would be mailed to tens of thousands of shareholders around the country.